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{"id":13004,"date":"2022-08-24T14:38:56","date_gmt":"2022-08-24T14:38:56","guid":{"rendered":"https:\/\/scienceandnerds.com\/2022\/08\/24\/elon-musk-vs-twitter-all-the-news-about-one-of-the-biggest-messiest-tech-deals-ever\/"},"modified":"2022-08-24T14:38:57","modified_gmt":"2022-08-24T14:38:57","slug":"elon-musk-vs-twitter-all-the-news-about-one-of-the-biggest-messiest-tech-deals-ever","status":"publish","type":"post","link":"https:\/\/scienceandnerds.com\/2022\/08\/24\/elon-musk-vs-twitter-all-the-news-about-one-of-the-biggest-messiest-tech-deals-ever\/","title":{"rendered":"Elon Musk vs. Twitter: all the news about one of the biggest, messiest tech deals ever"},"content":{"rendered":"

Source: https:\/\/www.theverge.com\/23026874\/elon-musk-twitter-buyout-news-updates<\/a>
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On Thursday, April 14th, Elon Musk announced an offer to buy Twitter for $54.20 a share. On April 25th, Twitter accepted the deal. By July 8th, Musk wanted out. Then Twitter sued Musk. And now we\u2019re headed for Chancery Court in Delaware for a five-day trial in October<\/a> that will determine who owns Twitter \u2014 and what happens after.<\/p>\n

This is a huge story with a lot of fast-moving parts to it. It\u2019s also a story that will likely stretch out over the next few months, maybe even longer. So we thought we\u2019d put together a guide for you, our readers, that can be updated as things continue to unfold. Because, like Elon<\/a>, we \u2764\ufe0f you.<\/p>\n

So strap in. It\u2019s going to be a bumpy ride. <\/p>\n

The latest news:<\/strong><\/p>\n

Peter \u201cMudge\u201d Zatko was fired in early 2022 from his position as Twitter\u2019s head of security. In July, he filed a whistleblower report saying Twitter has hidden negligent security practices, misled federal regulators about its safety, and failed to properly estimate the number of bots on its platform. Zatko is a long-tenured and well-respected voice<\/a> in the hacker and security community, and his allegations are sure to have a huge impact in and out of Twitter. Congress, for one, has already said it is investigating Zatko\u2019s claims<\/a>.<\/p>\n

Zatko\u2019s disclosure says directly that Twitter lied to Musk about its spam and bot measurements, which could be fodder for Musk\u2019s complaints about spambots, though Zatko\u2019s support for those particular allegations feels fairly thin. Twitter denied all the accusations,<\/a> calling them \u201ca false narrative.\u201d<\/p>\n

The subpoenas ahead of the trial have become a who\u2019s who<\/a> of the tech industry, including Dorsey, Larry Ellison, Marc Andreessen, Tesla, Keith Rabois, and many others. Dorsey was a surprise but seems likely to have plenty of pertinent information, given both his tenure as Twitter CEO and the fact that Dorsey reportedly pushed hard to convince Musk to buy the company in the first place.<\/p>\n

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Illustration by Kristen Radtke \/ The Verge; Getty Images<\/cite><\/p>\n

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The rest of the story so far:<\/strong><\/p>\n

The financing structure of Musk\u2019s Twitter acquisition has shifted over time<\/a>, but even after promising in April that \u201cno further TSLA sales planned after today,\u201d Musk sold another huge batch of his shares. \u201cIn the (hopefully unlikely) event that Twitter forces this deal to close *and* some equity partners don\u2019t come through,\u201d he tweeted soon after, \u201cit is important to avoid an emergency sale of Tesla stock.\u201d<\/p>\n

Musk\u2019s side wanted more time<\/a> and for the trial to start in February 2023. Twitter wanted it to start as soon as possible. Kathaleen McCormick, the Delaware Chancellor who will oversee the trial, said the trial will start on October 17th and will last five days. Of course, that assumes the two sides don\u2019t settle, and that remains anyone\u2019s guess.<\/p>\n

Twitter appears to be already feeling the Musk Effect: when it reported earnings in July, the company said its revenue fell for a variety of macroeconomic reasons but also because of what it described as \u201cuncertainty related to the pending acquisition of Twitter by an affiliate of Elon Musk.\u201d One thing Twitter won\u2019t give Musk credit for? Its user growth. The service reported reaching more than 237 million daily users, up from 229 million last quarter. That, of course, was due to \u201congoing product improvements.\u201d<\/p>\n

We wouldn\u2019t normally tell you it\u2019s worth reading a 162-page legal filing that gets deep into the weeds of bot measurement procedures. But this case has been filled with abnormally spicy legal fighting<\/a>, much of which was clearly written to be read by a wide audience. It\u2019s a good yarn.<\/p>\n

Almost as soon as Musk made clear his intentions to get out of buying Twitter, Twitter filed a lawsuit that said, in effect: you agreed to pay $44 billion for Twitter, and we intend to get all $44 billion for our shareholders. Twitter filed its suit in the Delaware Court of Chancery, which immediately became the most exciting judicial system nobody had ever heard of. It paints a picture of Musk going out of his way to make an unexpected and unusually generous offer to Twitter, only to almost immediately turn around and start toying with the company and the idea of abandoning their agreement.<\/p>\n

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Twitter has filed a lawsuit in the Delaware Court of Chancery to hold Elon Musk accountable to his contractual obligations.<\/p>\n

\u2014 Bret Taylor (@btaylor) July 12, 2022<\/a>\n<\/p><\/blockquote>\n<\/div>\n

It looked like it was going to happen, and then it did: only weeks after announcing his intention to buy Twitter, Musk tried to get out of it. Musk\u2019s team claimed he was terminating the deal because Twitter was in \u201cmaterial breach\u201d of their agreement and had made \u201cfalse and misleading\u201d statements during negotiations. In particular, Musk was concerned about the prevalence of fake or spam accounts on Twitter and what he saw as Twitter\u2019s reluctance to prove its own research on the subject.<\/p>\n

Musk joined a virtual town hall with Twitter employees and attempted to answer their questions about the future of the company and platform. He offered vague answers about wanting to emulate WeChat and learn from TikTok<\/a> and letting people work from home more often<\/a> while saying Twitter would attract 1 billion users. Meanwhile, he hinted that significant layoffs<\/a> could be in the company\u2019s future.<\/p>\n

After a number of cagey tweets and \u201cjust asking questions\u201d sorts of moves, Musk\u2019s legal team made its first official threat to back out of the acquisition. In a legal filing, they claimed that Twitter failed to provide Musk with information on the service\u2019s spam bot problem and that he\u2019s entitled to receive that information under the deal agreement. Twitter, they wrote, was actively preventing him from getting the information he needed. <\/p>\n

\u201cMy offer was based on Twitter\u2019s SEC filings being accurate,\u201d Musk tweeted, referencing Twitter\u2019s oft-cited number<\/a> that less than 5 percent of the accounts on the platform were fake or spam. \u201cYesterday, Twitter\u2019s CEO publicly refused to show proof of <5%. This deal cannot move forward until he does.\u201d Musk\u2019s frustration appeared to be totally beside the point and the sort of thing he should have raised before <\/em>signing a binding agreement to buy the company. But it was clear that if Musk decided he did <\/em>want out, this would be his way.<\/p>\n

The turmoil inside Twitter wasn\u2019t just coming from Musk and his legal team. Parag Agrawal, the still-new CEO of the company, fired some of his top executives, including consumer product leader Kayvon Beykpour and Bruce Falck, the general manager of revenue and head of product for its business side. \u201cThe priorities and decisions we make now will not only bolster how we navigate through this time,\u201d Agrawal said in a memo to Twitter\u2019s staff<\/a>, \u201cbut also for the longer-term success of Twitter which I care about deeply.\u201d<\/p>\n

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Parag Agrawal, the CEO of Twitter, has become Musk\u2019s main foil.<\/em><\/figcaption>Photo Illustration by Alex Castro \/ The Verge<\/cite><\/p>\n

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One other big Twitter-under-Musk question is what he\u2019ll do about the platform\u2019s permanent ban on Donald Trump. Musk said during a Financial Times <\/em>conference that he\u2019d undo it. \u201cI guess the answer is I would reverse the permaban,\u201d he said, \u201cobviously I don\u2019t own Twitter yet, so it\u2019s not a thing that will definitely happen because what if I don\u2019t own Twitter?\u201d<\/p>\n

Could Twitter Blue be the future of Twitter? Musk thinks so. He believes he can turn Twitter subscriptions into a $10 billion business by 2028, which would be double the entire company\u2019s current revenue. Of course, that also includes huge user growth: Musk estimated Twitter could have 600 million users in 2025 and 931 million in 2028. That\u2019s a big jump from the company\u2019s current crop of 217 million users.<\/p>\n

On April 25th, Twitter\u2019s board of directors accepted Musk\u2019s offer of $54.20 per share, or $44 billion, for total control of the company. It was the same price he named in his initial offer on April 14th. Upon completion of the transaction, Twitter will become a private company. Musk began working to line up financing for the deal and sold 9.6 million of his Tesla shares to free up about $8.4 billion.<\/p>\n

Hours after announcing his bid to buy Twitter, Musk was on stage in Vancouver for a well-timed interview with TED Talk founder Chris Anderson. During the conversation, Musk spoke about his \u201cobsession with the truth\u201d and echoed comments he made in his SEC filing about wanting to protect free speech and democracy.<\/p>\n

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